Jyothy Laboratories raises Rs550 crore from Axis Bank to refinance debt

Indian consumer products maker Jyothy Laboratories has raised Rs550 crore through a 5-year-loan from Axis Bank to refinance part of the debt it incurred to acquire a controlling stake in the Indian unit of Henkel AG, according to K Ullas Kamath, who was promoted as joint managing director with effect from 23 January.

The company, last year, acquired a 51-per cent stake in Henkel India for Rs570 crore including debt (See: Jyothy launches open offer for Henkel India buyout).

Kamath told reporters, "The fundraising is largely to meet our short-term debt requirement."

The loan, which carries a floating interest rate of 11.25 per cent, has a principal moratorium period of 18 months, he said.

Jyothy Labs took on short-term debt for the Henkel buyout from ICICI Bank, Kotak Mahindra Bank and Axis Bank, Reuters reported citing two unnamed sources.

The company had intended to raise funds through a private equity deal, but had put off the plan due to poor market conditions (See: Jyothy looks to raise Rs675-Rs900 crore from PE firms: report).

Jyothy makes the Ujala range of fabric care products, and has the largest market share in the category in India.